Apple Found Guilty of Conspiring to Fix Prices in E-Book Trial [Updated]
A federal judge on Wednesday ruled that Apple Inc conspired to raise the retail prices of e-books, and said a trial for damages will follow.
The decision by U.S. District Judge Denise Cote in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief.
The government had argued that Apple served as a "ringmaster" in conspiring with publishers to raise prices of e-books as part of an effort to change the business model of the industry and weaken Amazon's dominant position in the market. All of the publishers ultimately settled the case, but Apple fought to the end, insisting that it could not admit to doing something it did not do.
A separate trial will need to be held in order to determine damages to be levied against Apple.
We've uploaded the full 160-page decision by Judge Denise Cote for those interested in reading more.
The question in this case has always been a narrow one: whether Apple participated in a price-fixing scheme in violation of this country’s antitrust laws. Apple is liable here for facilitating and encouraging the Publisher Defendants’ collective, illegal restraint of trade. Through their conspiracy they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail e-book prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant.
Update 7:13 AM: Unsurprisingly, Apple has announced that it will appeal the decision.
Apple spokesman Tom Neumayr says Apple didn't conspire to fix e-book pricing and would continue to fight the "false accusations." He says Apple brought much needed innovation and competition into the market in 2010.